04 engaging high performers to retain key talent

8/9/2019 04 Engaging High Performers to Retain Key Talent

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The Context

Global IntegrationNo protected environmentMultiple geographies/

currencies/businessesDiverse operationsRegulatory frameworksInvestor expectations

Listing requirementsStringent disclosurerequirementsManagement styles and culturechanges


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Challenges for

Indian CompaniesGoing Global

TECHNOLOGYAdoption of technology

developed in other

countriesInvestment in bringing

technology to India

MANPOWERAttraction of global managers

Managers mindsets

Retention of talented employeesManagement of diversity of

cultures

Compensation management for

global careers

MARKETSCreation of brand equity

abroad

Channel management

Competition from global

brands

Competiton from localbrands in other countries

RISK MGMTCredit/currency/financial risk

Market risk

Operational risk

GOVERNANCE &

ETHICSConformance with legal

requirements on foreign soilHolding up to international

scrutiny

Due diligence of operations abroad

Constitution of Boards with

Independent Directors

MGMT OF CHANGEMindsets of existing managers

Bringing in flexibility

Changing old leadership styles

Aligning with world class

Aneeta Madhok, 2006

QUALITY MGMTWorld class business practices

Product and process quality

assurance

Six sigma standards

Conformance with local

quality standards

Our ResearchReveals

Challenges

Faced By Ceos


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Building

Interpersonal

Relatioships

Training for

Growth

HR Beyond

Tomorrow

Talent

Retention

CompensatingKnowledge

Workers

Recruiting in

Todays

Context

Going

Global

Managing

Mindsets

Creating High

Performing

Culture

HR Systems

Implementation

Human

Capital

Practices Aneeta Madhok, 2006

Our Research RevealsChallenges Faced By HR Managers


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Our Survey Results

17010Human Capital Practices102869HR Systems Implementation92268Going Global81467Building Interpersonal Relationships7 836

Compensating Knowledge Workers6

065Training for Growth5864Managing Mindsets40223Recruiting in Today's Context30282Talent Retention2

3471Creating A High Performing Culture1

% of bottomresponse (#10)

rank

% of topresponse(#1) rank

Rank inorder of

importanceHR Challenge

Rank Order of Importance (n=57)HR Challenges Survey India, May 2006

Aneeta Madhok, 2006


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What The Experts are Saying

about RetentionIn a research study of 539 CEOs worldwide,availability and retention of talented workers

and managers was rated as the sixth highestimperative for business today.

TURNOVER IS INCREASINGLY BECOMINGA SOURCE OF SLEEPLESS NIGHTS FORHR MANAGERS AND CEOS

Problems created by turnover


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about Retention

2007 CEO Survey Question:

What can be planned for, that is most critical toyour firms success?

78% of respondents cited retention ofkey workers is the #1 factor


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about Retention

"It's about building apool of managerialtalent stronger thanone's competitors.It's about winning in

the market. It's aboutperformance."


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Try to Prevent:High-Value Employees

High performance

Valued intellectualcapital

High promotionpotential

High training

investment High experience

Difficult to findreplacement

Do not Prevent:Low-Value Employees

Low performance

Little intellectualcapital

Low promotionpotential

Low training

investment Low experience

Easy to findreplacement

No attempt to Prevent:Regardless of Value

Retirement

Dual career

New career

Health

Child care orpregnancy

Return to school

Leave country

Take a break

Avoidable

(could prevent)

Unavoidable

(could not prevent)

Turnover Analysis


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What is Employee Retention?

Productivity

Morale

Customer

Satisfaction

Customer

RetentionRetention

Motivated

Engaged

Empowered

Excited

Loyal

Keeping the right employees

the most appropriate amount

of time AND moving them up

the retention curve


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A Model That Helps

Understand RetentionOrganizational Direction & Immediate Supervision

Information Means Motivation

Organization

Provides

Data

Providing Information

Providing Directions

Providing Feedback

Methods & Processes

Equipment & Supplies

Working Conditions

Work Organization

Incentives

Pay & Benefits

Advancement

Empowerment

Employee

Brings

Knowledge

Training

Capability

Individual Capacity

Willingness

Motives


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What Motivates Your Employees?

External EquityInternal Equity

Health benefits

Stock & stock options

Technology & toolsCompany/industry growth

Brand recognition

Job security

LocationTravel

Retirement contributions

Vacation

Product offerings

Total compensationPromotion opportunity

Job Content

Bonus

Work/life balanceResponsibility/ Challenge

Flexible work environment

Independence/

EmpowermentManager quality

Coworker quality

Skills development

Recognition


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7 Hidden Reasons

Employees Leave# 1: The Job or workplace was not as expected

# 2: Mismatch between Job and Person

# 3: Too little coaching and feedback# 4: Too few growth and advancement opportunities

# 5: Feeling devalued and unrecognised

# 6: Stress from overwork and work-life imbalance# 7: Loss of trust and confidence in senior leaders


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Source: HindustanTimes, Mumbai,02.07.07, pg 21

Survey

Findings


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Is Retention Your

Competitive Advantage?Relationship with Immediate Manager is consideredthe single most important job attribute by high-valuetalent.
mailto:[email protected]


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Retention Drivers

Organizational DirectionImmediate Supervision

Providing Directions

Providing Feedback

Equipment & SuppliesWorking Conditions

Work Organization

Pay administration

Pay and Benefits

Advancement

Training

Motivational efforts


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Company A vs. Company B

CompanyA

CompanyB


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Exercise OneYou work for Company B and your retention rate is

much shorter than Company A.If you were given Rs. five lakhs budget and asked to

apply that money to one or more Retention Driverswhich driver(s) would you invest in to getemployees to stay longer?

Discuss your thinking with members of the table and

try to reach a consensus.

You have 8 minutes to decide.


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Exercise Two

You still work for Company B. Based on the retentionpredictor assigned to your table define what specificactions you would recommend your company take toaddress the gap in the retention rate.

Discuss your thinking with members of the table and try toreach a consensus.

Assume the following:Your organization is not currently doing anything with regard

to this issue.

The study results are valid.

You have 15 minutes to decide.


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Natures Way

The story ofthe wise oldman


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Lessons from the Wise ManIt is important todifferentiate highperformers from averageand poor performers

Average performers arethose who meetexpectations and arevaluable. This messageis important

Poor performers need tobe brought in line through

Total Rewards strategy


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A Macro-Strategy for Retention

A CategoryHigh performers

B CategoryAverage performers

C CategoryNeeds improvement

Num

berofEmploye

es

Performance Level(low) (High)


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High Performers (A)

Maverick personalities

Driven by Achievement

Dont always go by the rule

bookUsually on the periphery ofthe system

They make a quantumdifference

Drive high-performingorganisations


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Average Performers (B)

Valuable people who meetorganisational goals andexpectations

They are the backbone

They need to be recognisedand valued

Mentoring and coaching

inputs work well withaverage performers tomotivate and anchor in themainstream of the

organisation


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Poor Performers (C)Message of developmentand improvement inperformance levels needsto be given

Need to invest inturnaround

Incentive plans help inbringing theirperformance toacceptable levels

Need intensive andspecial performancecounselling


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Some Facts About Pay Differentials

According to Mercers survey:Highest-performing employees(12 percent of the workforce) areexpected to receive base pay

raises of 5.7 percent in 2007.Average performers (52 percentof the workforce) are expected toreceive base pay raises of 3.5percent in 2007.

Weakest performers (3 percentof the workforce) are expected toreceive base pay increases of1.7 percent in 2007 As cited in:

2008 Pay Projections: Increased Ties to PerformanceBy Stephen Miller, August 2007

www.shrm.org


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Some Facts About Incentives

Management

Professional

Officer/clerical

Highest

Rated 27% 20% 15%MiddleRated 20% 14% 11%

LowestRated 10% 7% 6%

As cited in:2008 Pay Projections: Increased Ties to PerformanceBy Stephen Miller, August 2007www.shrm.org


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Essentials of an Incentive System

Clear link between individualgoals and incentives

Methods of differentiatingperformance differentials

Final review by impartial arbiter

Grievance process to addressemployee concerns

Annual publication of ratings andpay decisions

Employee surveys to measuresatisfaction with the system

US General Accounting Office Guidelines


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Pay-for-performance DoesntAlways Pay Off

Pay-for-performance mayhave a natural life cyclethat managers areunaware of

Michael Beers, HBSProfessor

Pay-for-performance cancast a pull over self-esteem, teamwork andcreativity

Teresa Amabile


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Keeping Our Best: 4 Steps

1. Identify Your High-Value Employees

2. Assess Turnover/Disengagement Risk

3. Conduct Exploratory Interviews

4. Develop Key Employee Profiles andCustomized Retention Plans


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Step 1: Identify Your HighValue Employees


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Identifying High Performers

SOME CRITERIABelieves in the organisational values,vision and missionUnderstands organisations businessand goals

Consistently produces high results(SMART)Is Customer FocusedHigh levels of competencies definedin organisational system

Is respected and trusted by others inthe systemA self starter, learnerAdds value, goes beyond call of dutyCreative thinker and problem solver


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Identifying Key TalentCapability shortfall for the business sector

Talent drainpipes (eg. oil sector)

Positions of critical or strategic importance

Inner circle trusted relationships

Historical problem areasFuture leadership


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Key Employee Compensation Review

Submit the names ofyour high-valueemployees tocompensation.

Compensation returnsan analysis with issuesand recommendations.

Name

Position

What arethe signals

flashing?

Base Pay Bonus

Stock OptionsRecognition


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Step 2: Assess Turnover/Disengagement Risk

Has the employee expressedfrustration?

Do the employeesskills/interests match the theposition? Do they align withthe business strategy?

Has there been a change inthe employees personal life?


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Step 3: Conduct Exploratory

InterviewsWhat?Informal meetings, separatefrom performance reviews.

Why?To emphasize eachemployees value.

To understand his/her top

motivators, job satisfaction andany termination riskso thatyou can proactively addressany issues and focus on whatreally matters.


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Sample Interview Questions

Job Satisfaction What makes you want to come to work each day?

Job Content Which particular projects/clients/assignments are appealing to you?

Recognition How can I make your day?

Manager Relationship

How can I be a more effective manager for you?Retention

What is the number one reason you choose to continue working forus?

l


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Step 4: Complete a KeyEmployee Profile

For each high valueemployee, describe:

The employees critical

skills, knowledge, impact ifhe/she quit.

The employees top

motivators, issues, desires.

Planned actions to address

issues and ensure the

employee is engaged.


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Recommended Reading

Harvard Business Review Job Sculpting: The Art of Retaining

Your Best People, Sept 1999 by

Timothy Butler and James Waldroop


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Contact at:Aneeta Madhok, PhD. CMC

DeanCenter for Human Resources

Block 5, Academic CityDubai, UAE

[email protected]@gmail.com
mailto:[email protected]:[email protected]


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Problems Created by Turnover

Interferes with continuity and quality ofservices and loss of revenue

Lost human and financial investments ineducation, training, and expertise

Weakens professional organizational culture

and moralePlaces additional burden on remaining staff

next


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Problems Created by TurnoverHigh turnover breeds more turnover

3 to 6 month lag time for new employees todevelop

Delays in replacing staff send negativemessages to the clients, other employeesand public at large

next


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Problems Created by TurnoverTurnover costs companies more profitdollars than anyone thinks.

Turnover is not the problemits asymptom caused by something else.

Turnover can be reduced using Low Cost,High Leverage interventions that create

High Value for the organization.

Back to main presentation


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Lets Be Realistic!

Employee retention can contribute toorganizational effectiveness

Turnover is not only costly but may be beneficial

Focus of retention strategies

Number of employees retained and

Who is retained

Turnover is inevitable

Approach to retention management Gather and analyze employees reasons for

leaving


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Turnover Analysis

Permanent layoff

Temporary layoff

Site or plant closing,relocation

Redundancy due tomerger or acquisition

Downsizing

Discipline

Poor performance

Discharge


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Causes of Voluntary Turnover

Quit

AlternativesInternal: New job possibilities

External: Job offers

+

Desirability of LeavingLow job satisfaction

Shocks to employee

Personal (nonjob) reasons

+

Ease of LeavingFavorable labor market conditions

Versatile competencies

Low cost of leaving

+ Intentionto Quit

+


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Causes of Turnover:

Discharge and DownsizingDischarge turnover Mismatch between job requirements and competencies

Employee fails to follow rules and procedures

Unacceptable job performance

Downsizing turnover

Mismatch in staffing levels which leads to an overstaffingsituation

Factors related to overstaffing

Lack of forecasting and planning Inaccuracies in forecasting and planning

Unanticipated changes in labor demand and/or supply


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Measurement of TurnoverTurnover rate

Number of employees leaving average number ofemployees x 100

Data and decisions

Identify time period of interest

Determine type of employees that count

Determine method to calculate average number ofemployees over the time period


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Measurement of Turnover:Breakouts and Benchmarks

Breakouts Analysis of turnover data aided by deciding on

categories of data

Type of turnover Type of employee

Job category

Geographic location

Benchmarks Internal - Trend analysis External - Compare internal data with external

data

M t f T


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Measurement of Turnover:Reasons for Leaving

Important to ascertain, record, and track reasonswhy employees leave

Tools Exit interviews

Formal, planned interviews with departing employees

Post-exit surveys Surveys sent to employees soon after their last day

Employee satisfaction surveys

Surveys of current employees to discover sources ofdissatisfaction which may become reasons for leaving

Results can provide information to pre-empt turnover

Require substantial resources

C d ti E it I t i


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Conducting Exit InterviewsInterviewer should be a neutral persontrained in how to conduct exit interviews

Training issues

How to put employee at ease andexplain purpose

How to follow structured interviewformat and take notes

How to end interview on positive noteStructured interview format should containquestions about unavoidable andavoidable reasons for leaving

Interviewer should prepare by reviewing

interview format and intervieweespersonnel file

Interview should be conducted in private,before employees last day

Interviewee should be told interview is

confidential


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Challenges of EmployeeEngagement & Retention

Doing more with less.

A perfect storm of social, economic &

organizational changes.

Lack of trust in the workplace.

No more one-size-fits-all.


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Measurement of Turnover:

Costs and BenefitsCosts and benefits can be estimated for each of thethree turnover types

Types of costs

Financial

Non-financial

Some costs and benefits can be estimated

financiallyNon-financial costs and benefits may outweighfinancial ones in importance and impact


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Decision Processfor Retention Initiatives

Do We Think Turnover Is a Problem?

How Might We Attack the Problem?

What Do We Need to Decide?

Should We Proceed?

How Should We Evaluate the Initiatives?

h l


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Why Prioritize Employee RetentionEven if Turnover is Low?

Data on the average employee misrepresents thepicture for most valued employees:

High performers perceive strong marketopportunities.

In lean times, competition intensifies for highperformers.

Turnover of key employees causes remainingemployees to re-assess.

High performers generate disproportionate value.


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Guidelines for IncreasingJob Satisfaction and Retention

Match rewards to employee preferences

Make rewards unique

Rewards must be meaningful

Link rewards to retention behaviorsDeliver on rewards that are promised

Reward permanency is important

Remember intrinsic rewards

Fairness and justice are keyCommunicate continuously

The manager matters


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Ease of LeavingTWO POINTS OF ATTACK

Provide organization-specific training

Should organization invest in training to provide generalor organization-specific competencies?

Combine training strategy with a selection strategyfocused on assessing and selecting generalcompetencies

Increase cost of leaving by providing

Above-market pay and benefits Deferred compensation

Retention bonuses

Desirable location of companys facilities


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Alternatives

APPROACHES TO MAKE INTERNALALTERNATIVES MORE DESIRABLE THAN

OUTSIDE ALTERNATIVESInternal staffing

Encourage employees to seek internal job opportunities Provide attractive internal options outside of traditional internal staffing

system

Responding to external job offers entails developingappropriate policies

Decide whether to provide counteroffers or not Determine types of employees to provide counteroffers

Decide who will develop counteroffer and nature of approval process


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Performance

ManagementProcess

Organization Strategy

Work-Unit Plans

(1) Performance Planning

GoalsCompetencies

(2) Performance Execution

ResourcesCoachingFeedback

(3) Performance Appraisal

Goal attainmentCompetency ratingsWritten commentsFeedback

(4) Decisions

PayTraining/career plansPerformance problemsRetention


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Retention Initiatives:

DownsizingWeigh advantages and disadvantagesStaffing levels and quality View retention in two ways

Balance a financial quick fix against unlikely return ofdownsized employees if economic conditions improve

Approach reductions in selective or targeted terms, rather thanacross the board

Determine who should be retained, if cuts are made

Retain most senior employees Make performance-based decisions Retain high-value employees and layoff low-value employees

i i i i


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Retention Initiatives:Downsizing

Alternatives to downsizing No layoff or guaranteed employment policy Layoff minimization programs

Layoff Minimization Examples

Employees who remain Potential results of ignoring survivors Increased stress levels Critical appraisals of downsizing process Examples of survivor sickness

Provide programs to meet needs of survivors Enhanced communication programs Morale-boosting events Promotion of EAPs

Stress-related training


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Ethical Issues in Separation

Basic tenet of employee separation Fair and consistent treatment of employees

Laws and regulations governing separation process Public policy restrictions on employment-at-will

Employment discrimination laws and regulations Affirmative action requirements Employment contract principles Labor contract provisions

Civil service laws and regulations Negligent supervision and retention Advanced warning about plant closings


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Performance Appraisal Systems

Appraisal criteria should be job-related, specific, and communicatedin advanceManager/rater should receive training in overall performanceappraisal process and how to avoid rating errorsManager should be familiar with employees job description

and actual performanceAgreement should exist among different raters in evaluating anemployees performanceEvaluations should be in writingEmployee should be able to review evaluation and make commentsbefore it becomes finalEmployee should receive timely feedback about the evaluation andan explanation for any outcome decisionProvide upward review of employees appraisalProvide appeal system for employees dissatisfied with theirevaluations

04 engaging high performers to retain key talent

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